Times are hard – you’ve lost your job, you got sick, the market still hasn’t turned around – and you have not been able to make your monthly credit card payments. The collection letters come, but you set them to the side. Creditors have been calling, but now you recognize the number and just don’t answer your phone any more. But today, the Sheriff arrived and delivered an Order for a Hearing in Aid in Execution of Judgment to you – what now?
Under Kansas law the Statute suggests that this scheduled hearing is to be used to obtain information by the creditor about the assets of the debtor (you). Actually it is used to make payment plans. But, first and foremost – Attend! The Statute states in part:
“ If any person fails, neglects or refuses to appear and answer concerning the person’s property and income at the time and place specified in an order for a hearing in aid of execution or, if any person subpoenaed to appear as a witness at the hearing fails, neglects or refuses to appear or to testify concerning anything about which the person can lawfully be interrogated, the person shall be guilty of contempt of court, and the court shall issue a citation requiring the person, at an early date specified in the citation, to appear before the court and show cause, if any, why the person should not be punished for contempt. If, after proper service of the citation by any officer or other person, the person does not appear before the court on the specified day or if it appears to the court that the person is hiding to avoid the process of the court or is about to leave the county for that purpose, the court may issue an attachment or bench warrant commanding the officer to whom it is directed to bring the person before the court to answer for contempt. If the court determines that any such person is guilty of contempt, the person shall be punished as the court directs.”
That said, once you speak with the Creditor at the hearing; do not make any payment agreements that you cannot keep. Look at a budget and determine an amount you can pay monthly. Consider offering to increase payments over time, as other bills decrease, but you should propose to begin paying something at the next pay date.
If you are on Social Security, SSI, Railroad Retirement, some types of VA benefits, Black Lung benefits, State assistance, Unemployment Compensation (with some exceptions) and Workers’ Comp Benefits, payment arrangements are purely optional. They cannot take any Social Security funds you have or are scheduled to receive. Make sure you keep these funds in a separate account. Do not comingle them with other income of any nature.
If you are employed, you will need to try and work out a payment agreement. If one is not reached, then the next step for the Creditor will be to get an Order for Garnishment. It is possible for the Creditor to garnish up to 25% of your income (after taxes). Once a garnishment has started it will not stop until the debt (judgment) has been paid off or unless you file for Bankruptcy.
If you are unable to set up a payment plan due to unemployment, the Creditor can continue to call you back to Court. The Statute does not state how often one may be ordered back; however, many counties have established a local rule regarding this issue. For example, in Shawnee County, a judgment debtor may not be ordered to appear before eight weeks following the appearance and is dismissed after 3 months of regular payments. All persons found, by court or administratively, to be disabled are dismissed from this docket. In Sedgwick County and Johnson County, there is a limit to not more than 2 garnishments against the same person in a 30 day period. There is no rule about letting people out for regular payment or if disabled.
If you just cannot get a grasp on your financial situation it may be time to speak with a lawyer. The Kansas City Bankruptcy Attorneys of Walden &Pfannenstiel, LLC do not represent clients in State Court collection actions. However, we can help you determine if Bankruptcy is in your best interest. If you want the letters, calls, and hearings to stop a fresh start may only be an email away.